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Thursday, 14 May 20
OPEC REVISES DOWN GLOBAL OIL DEMAND FORECAST AGAIN
 Crude Oil Price Movements
Crude oil prices recorded a second sharp monthly drop in April, amid an increasing oil surplus in the spot market. The OPEC Reference Basket (ORB) value plummeted by $16.26, or 48.0%, m-o-m, to $17.66/b, the lowest monthly level since December 2001. With regard to crude futures, ICE Brent declined by $7.10, or 21%, to average $26.63/b, while NYMEX WTI fell by $13.75, or 45.2%, to average $16.70/b. The contango structure of the forward curves of all crude futures benchmarks steepened further, on further worsening of global oil market fundamentals and a rapid increase in global oil inventories. Money managers firmly raised their combined futures and options net long positions in April in both ICE Brent and NYMEX WTI contracts.
World Economy
The world economy is forecast to face a recession in 2020, declining by 3.4%, following global economic growth of 2.9% in the previous year. Within the OECD, the US is forecast to contract by 5.2% in 2020, following growth of 2.3% in 2019. An even larger decline is expected in the Euro-zone, where economic activity is forecast to fall by 8.0% in 2020, compared to growth of 1.2% in 2019. Japan is forecast to contract by 5.1% in 2020, comparing to growth of 0.7% in 2019. China’s 2020 GDP is forecast to grow by 1.3%, recovering from a sharp contraction in 1Q20, and following growth of 6.1% in 2019. India is forecast to decline by 0.2%, a sharp slowdown from already weakening growth of 5.3% in 2019. Brazil’s economy is forecast to contract by 6.0% in 2020, following growth of 1.1% in 2019. Russia’s economy is forecast to contract by 4.5% in 2020, after growth of 1.3% in 2019, not only due to COVID-19, but also because of the considerable decline in oil prices.
World Oil Demand
For 2019, world oil demand growth is kept broadly unchanged compared to last month’s assessment, estimated to have grown by 0.83 mb/d, y-o-y, to average 98.72 mb/d. In 2020, world oil demand growth is adjusted lower by 2.23 mb/d and is now forecast to drop by 9.07 mb/d. However, the worst contraction in major oil demand centers around the world is expected to take place in the 2Q20, mostly in OECD Americas and Europe, with transportation and industrial fuels affected the most. As such, OECD oil demand is now revised lower by 1.20 mb/d while non-OECD oil demand growth was adjusted down by 1.03 mb/d, for total oil demand to reach 90.59 mb/d. Indeed, demand contraction in 2020 can be mitigated with sooner than expected easing of government COVID-19 related measures, and faster response of economic growth to the implemented extraordinary stimulus packages.
World Oil Supply
The non-OPEC oil supply growth estimate in 2019 is now revised up slightly by 0.04 mb/d from the previous month’s assessment, due to an upward revision in Australia’s production data, and is estimated to have grown by 2.02 mb/d. For 2020, non-OPEC oil supply is revised down further by almost 2.0 mb/d from the previous projection, and is now forecast to decline by 3.5 mb/d. The main revisions of the month are based on production shut-ins or curtailment plans announced by oil companies – including the majors – particularly in North America. Globally, not including the countries participating in the Declaration of Cooperation (DoC) and as of 6 May 2020, around 3.6 mb/d of production cuts have been announced, so far, in response to the lack of demand, low oil prices, excess supply and limited storage capacity. The 2020 oil supply growth forecast for the US is revised down by 1.3 mb/d to now show a decline of 1.4 mb/d y-o-y. Other large downward revisions are undertaken for Canada and Brazil by 0.3 mb/d and 0.1 mb/d, respectively. Oil supply in 2020 is forecast to show growth only in Norway, Brazil, Guyana and Australia. OPEC NGLs production in 2019 is estimated to have grown by 0.04 mb/d to average 4.79 mb/d and for 2020 is forecast to grow by 0.04 mb/d to average 4.83 mb/d. In April, OPEC crude oil production increased by 1.80 mb/d m-o-m to average 30.41 mb/d, according to secondary sources
Product Markets and Refining
Operations Refinery margins in the Atlantic Basin rebounded in April. Deeper refinery intake cuts as well as low feedstock prices helped offset weak demand. In addition, the relaxation of confinement measures in the US and Europe amid the onset of the driving season, provided much-needed stimulus to the top of the barrel. In Asia, however, stronger product availability, as refineries increased processing rates, outpaced product inventory drawdowns amid a lack of demand from overseas, weighed on the regional product market.
Tanker Market
April was a stellar month for the tanker market with both dirty and clean rates seeing spikes during the month. Dirty freight rates peaked early in April and then trended lower, although remaining at relatively high levels. Rates were supported by a surge in tanker demand, driven by low crude prices and a need to push out excess supplies amid concerns about the availability of onshore storage capacity. Meanwhile, clean tanker rates jumped to historic highs in the middle of April, as refiners and traders looked to boosting product exports and turned to floating storage. However, rates returned to more typical levels by the end of the month. The expected voluntary and involuntary production reductions are expected to weigh on tanker demand in the coming months, although increased floating storage will provided offsetting support.
Crude and Refined Products Trade
According to preliminary data, US crude imports in April fell to 5.4 mb/d – the lowest since 1992 – while the country’s crude exports averaged 3.2 mb/d, down from a peak of 3.7 mb/d in February 2020. In March, China’s crude imports averaged 9.7 mb/d, falling below 10 mb/d for the first time in eight months. Product exports from China surged to 1.85 mb/d, the second highest level on record, led by a jump in diesel exports. India’s crude imports dipped in March to average 4.6 mb/d, impacted by the government-ordered lockdown which began toward the end of the month. India’s product exports rose 10% m-o-m, supported by an increase in diesel exports. Crude imports into Japan increased for the first time in two months, averaging 3.1 mb/d in March, while product imports and exports were slightly lower. The latest official data for OECD Europe shows crude exports continuing to fall in January, reaching 2.2 mb/d.
Commercial Stock Movements
OECD commercial oil stocks rose by 57.7 mb m-o-m in March to stand at 3,002 mb. This was 125.8 mb higher than the same time one year ago and 88.6 mb above the latest five-year average. Within components, crude stocks surged by 49.1 mb, while product stocks rose by 8.6 mb, m-o-m. In terms of days of forward cover, OECD commercial stocks surged by 8.9 days m-o-m in March to stand at 86.1 days. This was 25.1 days above March 2019, and 23.8 days above the latest five-year average. Preliminary data for April showed that US total commercial oil stocks surged by 81.1 mb m-o-m to stand at 1,395 mb. This was 136.1 mb, or 10.8%, above the same period a year ago, and 123.7 mb, or 9.7%, higher than the latest five-year average. Within components, crude stocks climbed by 47.9 mb, and product stocks rose by 33.2 mb m-o-m in April. Balance of
Supply and Demand
Demand for OPEC crude in 2019 stood at 29.8 mb/d, 1.2 mb/d lower than the 2018 level. For 2020, and following the recent agreement reached at the extraordinary OPEC and non-OPEC Ministerial Meetings in April, demand for OPEC crude is expected at 24.3 mb/d, which is 5.6 mb/d lower than the 2019 level. It is worth noting that demand for OPEC crude in 2020 remained almost the same as last month’s assessment, both considering the voluntary adjustment volumes under the Declaration of Cooperation (DoC) framework. However, additional reductions recently announced by several OPEC member countries, above and beyond their voluntary commitments under DoC, are expected to expedite market re-balancing, and improve the demand for OPEC crude in 2020.
Source: OPEC
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Wednesday, 31 January 24
CHINA'S INNER MONGOLIA COAL OUTPUT HIT 1.21B TONS IN 2023 - XINHUA
North China’s Inner Mongolia autonomous region churned out 1.21 billion tons of coal in 2023 as it strives to guarantee the country’s e ...
Wednesday, 31 January 24
GAS EXPORTS COST U.S. CONSUMERS MORE THAN $100 BILLION OVER 16-MONTH PERIOD - IEEFA
Limited Demand Growth Could Dampen the Dry Bulk Market in the Coming Months BIMCOStarting in late 2021—before its invasion of Ukraine—R ...
Tuesday, 30 January 24
LIMITED DEMAND GROWTH COULD DAMPEN THE DRY BULK MARKET IN THE COMING MONTHS - BIMCO
Demand
In our base scenario, we expect cargo demand to grow by 0-1% in 2024 and 0.5-1.5% in 2025. This is a 0.5 percentage point reduction for ...
Friday, 26 January 24
RED SEA DIVERSIONS ADD NEARLY A MILLION DOLLARS PER VOYAGE TO SHIPPING COSTS WHILE DOUBLING TRANSIT TIME - LSEG
The incremental costs of diverting a tanker from Asia to NW Europe via the Cape of Good Hope is accounting for an extra $932,905 USD per voyage whi ...
Friday, 26 January 24
HARD COAL GUARDIAN ANGEL OF THE ENERGY SUPPLY - GERMANY COAL IMPORTERS ASSOCIATION
- No security of supply without hard coal
- The Substitute Power Plant Provision Act (EKBG) must be extended
- Higher grid fees due to the ...
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- Minerals Council of Australia
- White Energy Company Limited
- AsiaOL BioFuels Corp., Philippines
- Sree Jayajothi Cements Limited - India
- Madhucon Powers Ltd - India
- Merrill Lynch Commodities Europe
- Straits Asia Resources Limited - Singapore
- Singapore Mercantile Exchange
- Krishnapatnam Port Company Ltd. - India
- Vijayanagar Sugar Pvt Ltd - India
- Electricity Generating Authority of Thailand
- Jaiprakash Power Ventures ltd
- Price Waterhouse Coopers - Russia
- Semirara Mining and Power Corporation, Philippines
- SN Aboitiz Power Inc, Philippines
- LBH Netherlands Bv - Netherlands
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Thai Mozambique Logistica
- Pendopo Energi Batubara - Indonesia
- GVK Power & Infra Limited - India
- Miang Besar Coal Terminal - Indonesia
- Trasteel International SA, Italy
- Bhoruka Overseas - Indonesia
- Eastern Coal Council - USA
- Baramulti Group, Indonesia
- Binh Thuan Hamico - Vietnam
- Carbofer General Trading SA - India
- Salva Resources Pvt Ltd - India
- Metalloyd Limited - United Kingdom
- Africa Commodities Group - South Africa
- PTC India Limited - India
- Kalimantan Lumbung Energi - Indonesia
- Indogreen Group - Indonesia
- Independent Power Producers Association of India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- GAC Shipping (India) Pvt Ltd
- Siam City Cement - Thailand
- Cigading International Bulk Terminal - Indonesia
- Latin American Coal - Colombia
- Central Electricity Authority - India
- MS Steel International - UAE
- GN Power Mariveles Coal Plant, Philippines
- Kohat Cement Company Ltd. - Pakistan
- Intertek Mineral Services - Indonesia
- Karaikal Port Pvt Ltd - India
- Malabar Cements Ltd - India
- Alfred C Toepfer International GmbH - Germany
- ASAPP Information Group - India
- Bangladesh Power Developement Board
- Essar Steel Hazira Ltd - India
- Georgia Ports Authority, United States
- Marubeni Corporation - India
- Cement Manufacturers Association - India
- Bukit Asam (Persero) Tbk - Indonesia
- South Luzon Thermal Energy Corporation
- Power Finance Corporation Ltd., India
- IEA Clean Coal Centre - UK
- Kobexindo Tractors - Indoneisa
- PNOC Exploration Corporation - Philippines
- Posco Energy - South Korea
- VISA Power Limited - India
- Anglo American - United Kingdom
- London Commodity Brokers - England
- Edison Trading Spa - Italy
- Ambuja Cements Ltd - India
- Sindya Power Generating Company Private Ltd
- Commonwealth Bank - Australia
- Gujarat Electricity Regulatory Commission - India
- Chettinad Cement Corporation Ltd - India
- Rashtriya Ispat Nigam Limited - India
- Mjunction Services Limited - India
- Simpson Spence & Young - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Barasentosa Lestari - Indonesia
- Wilmar Investment Holdings
- Banpu Public Company Limited - Thailand
- Sical Logistics Limited - India
- Kumho Petrochemical, South Korea
- India Bulls Power Limited - India
- Port Waratah Coal Services - Australia
- Petrochimia International Co. Ltd.- Taiwan
- Bank of Tokyo Mitsubishi UFJ Ltd
- Australian Commodity Traders Exchange
- Gujarat Mineral Development Corp Ltd - India
- Offshore Bulk Terminal Pte Ltd, Singapore
- Gujarat Sidhee Cement - India
- Medco Energi Mining Internasional
- Meralco Power Generation, Philippines
- IHS Mccloskey Coal Group - USA
- Indian Oil Corporation Limited
- Maheswari Brothers Coal Limited - India
- Parry Sugars Refinery, India
- The State Trading Corporation of India Ltd
- Energy Development Corp, Philippines
- Kartika Selabumi Mining - Indonesia
- Romanian Commodities Exchange
- International Coal Ventures Pvt Ltd - India
- Sakthi Sugars Limited - India
- OPG Power Generation Pvt Ltd - India
- Goldman Sachs - Singapore
- Central Java Power - Indonesia
- Savvy Resources Ltd - HongKong
- TeaM Sual Corporation - Philippines
- Electricity Authority, New Zealand
- Planning Commission, India
- Interocean Group of Companies - India
- Global Green Power PLC Corporation, Philippines
- Samtan Co., Ltd - South Korea
- Sinarmas Energy and Mining - Indonesia
- Therma Luzon, Inc, Philippines
- Renaissance Capital - South Africa
- McConnell Dowell - Australia
- Siam City Cement PLC, Thailand
- Semirara Mining Corp, Philippines
- Makarim & Taira - Indonesia
- Globalindo Alam Lestari - Indonesia
- Attock Cement Pakistan Limited
- Tamil Nadu electricity Board
- Dalmia Cement Bharat India
- Formosa Plastics Group - Taiwan
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Kapuas Tunggal Persada - Indonesia
- Ind-Barath Power Infra Limited - India
- Coal and Oil Company - UAE
- Xindia Steels Limited - India
- Grasim Industreis Ltd - India
- Bhatia International Limited - India
- Coalindo Energy - Indonesia
- Heidelberg Cement - Germany
- Ministry of Mines - Canada
- Sojitz Corporation - Japan
- SMC Global Power, Philippines
- PetroVietnam Power Coal Import and Supply Company
- Aditya Birla Group - India
- Wood Mackenzie - Singapore
- CNBM International Corporation - China
- Sarangani Energy Corporation, Philippines
- Karbindo Abesyapradhi - Indoneisa
- Bulk Trading Sa - Switzerland
- Tata Chemicals Ltd - India
- Riau Bara Harum - Indonesia
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Mercuria Energy - Indonesia
- GMR Energy Limited - India
- Ministry of Transport, Egypt
- Bukit Baiduri Energy - Indonesia
- Indonesian Coal Mining Association
- Directorate General of MIneral and Coal - Indonesia
- Lanco Infratech Ltd - India
- Energy Link Ltd, New Zealand
- Asmin Koalindo Tuhup - Indonesia
- Standard Chartered Bank - UAE
- San Jose City I Power Corp, Philippines
- Eastern Energy - Thailand
- Toyota Tsusho Corporation, Japan
- PowerSource Philippines DevCo
- Ceylon Electricity Board - Sri Lanka
- SMG Consultants - Indonesia
- Bayan Resources Tbk. - Indonesia
- Antam Resourcindo - Indonesia
- Parliament of New Zealand
- Deloitte Consulting - India
- Vizag Seaport Private Limited - India
- Mercator Lines Limited - India
- Vedanta Resources Plc - India
- Neyveli Lignite Corporation Ltd, - India
- Timah Investasi Mineral - Indoneisa
- Aboitiz Power Corporation - Philippines
- Rio Tinto Coal - Australia
- Orica Australia Pty. Ltd.
- Australian Coal Association
- Kaltim Prima Coal - Indonesia
- Oldendorff Carriers - Singapore
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Thiess Contractors Indonesia
- Meenaskhi Energy Private Limited - India
- Star Paper Mills Limited - India
- Indo Tambangraya Megah - Indonesia
- Larsen & Toubro Limited - India
- Ministry of Finance - Indonesia
- Economic Council, Georgia
- ICICI Bank Limited - India
- Indian Energy Exchange, India
- Bhushan Steel Limited - India
- Global Coal Blending Company Limited - Australia
- Chamber of Mines of South Africa
- The University of Queensland
- Pipit Mutiara Jaya. PT, Indonesia
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- Bharathi Cement Corporation - India
- Holcim Trading Pte Ltd - Singapore
- Kideco Jaya Agung - Indonesia
- Mintek Dendrill Indonesia
- The Treasury - Australian Government
- Coastal Gujarat Power Limited - India
- Altura Mining Limited, Indonesia
- Leighton Contractors Pty Ltd - Australia
- Videocon Industries ltd - India
- Directorate Of Revenue Intelligence - India
- Indika Energy - Indonesia
- Petron Corporation, Philippines
- New Zealand Coal & Carbon
- Agrawal Coal Company - India
- Bukit Makmur.PT - Indonesia
- Iligan Light & Power Inc, Philippines
- European Bulk Services B.V. - Netherlands
- Billiton Holdings Pty Ltd - Australia
- Maharashtra Electricity Regulatory Commission - India
- Global Business Power Corporation, Philippines
- Orica Mining Services - Indonesia
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